Adjusted income from continuing operations* was
Full year 2008 revenues were
“Orbital concluded 2008 with an excellent fourth quarter,” said Mr.
Financial Highlights
Financial results were as follows (in millions, except per share data):
Fourth Quarter | ||||||||
2008 | 2007 | |||||||
Revenues | $ | 310.9 | $ | 279.1 | ||||
Operating Income | 22.4 | 22.2 | ||||||
Income from Continuing Operations | 13.2 | 14.6 | ||||||
Adjusted Income from Continuing Operations | 19.4 |
(1) |
n/a | |||||
Income from Discontinued Operations | - | 1.1 | ||||||
Net Income | 13.2 | 15.8 | ||||||
Diluted Earnings per Share: | ||||||||
Continuing Operations | $ | 0.22 | $ | 0.24 | ||||
Adjusted Continuing Operations | 0.33 |
(1) |
n/a | |||||
Discontinued Operations | - | 0.02 | ||||||
Net Income | 0.22 | 0.26 |
(1) Adjusted to exclude a $6.2 million investment impairment charge in the fourth quarter of 2008. See "Disclosure of Non-GAAP Financial Measures" below. |
Full Year | ||||||||
2008 | 2007 | |||||||
Revenues | $ | 1,174.3 | $ | 1,033.9 | ||||
Operating Income | 89.9 | 81.2 | ||||||
Income from Continuing Operations | 48.8 | 53.7 | ||||||
Adjusted Income from Continuing Operations | 66.6 |
(1) |
n/a | |||||
Gain on Sale of TMS and Income from Discontinued Operations | 15.9 |
(2) |
3.1 | |||||
Net Income | 64.7 | 56.7 | ||||||
Diluted Earnings per Share: | ||||||||
Continuing Operations | $ | 0.81 | $ | 0.88 | ||||
Adjusted Continuing Operations | 1.11 |
(1) |
n/a | |||||
Gain on Sale of TMS and Income from Discontinued Operations | 0.26 |
(2) |
0.05 | |||||
Net Income | 1.08 | 0.93 |
(1) Adjusted to exclude $17.8 million of investment impairment charges in 2008. See "Disclosure of Non-GAAP Financial Measures" below. |
(2) Includes a $14.8 million after-tax gain, or $0.25 diluted earnings per share, on the sale of the company's Transportation Management Systems (TMS) business unit in the second quarter of 2008. |
Revenues
Revenues by segment for the fourth quarter were as follows (in millions):
Fourth Quarter | ||||||||
2008 | 2007 | |||||||
Launch Vehicles | $ | 127.8 | $ | 104.6 | ||||
Satellites and Space Systems | 107.8 | 121.2 | ||||||
Advanced Space Programs | 77.1 | 54.1 | ||||||
Eliminations | (1.8 | ) | (0.8 | ) | ||||
Total Revenues | $ | 310.9 | $ | 279.1 |
Fourth quarter 2008 revenues were
Revenues by segment for the full year were as follows (in millions):
Full Year | ||||||||
2008 | 2007 | |||||||
Launch Vehicles | $ | 459.9 | $ | 395.3 | ||||
Satellites and Space Systems | 422.3 | 466.7 | ||||||
Advanced Space Programs | 298.1 | 175.1 | ||||||
Eliminations | (6.0 | ) | (3.2 | ) | ||||
Total Revenues | $ | 1,174.3 | $ | 1,033.9 |
Full year 2008 revenues were
Operating Income
Operating income by segment for the fourth quarter was as follows (in millions):
Fourth Quarter | |||||||
2008 | 2007 | ||||||
Launch Vehicles | $ | 9.8 | $ | 10.6 | |||
Satellites and Space Systems | 8.7 | 8.4 | |||||
Advanced Space Programs | 3.9 | 3.5 | |||||
Corporate and Other | - | (0.3 | ) | ||||
Total Operating Income | $ | 22.4 | $ | 22.2 |
Operating income was
Research and development expenses totaled
Operating income by segment for the full year was as follows (in millions):
Full Year | ||||||||
2008 | 2007 | |||||||
Launch Vehicles | $ | 39.2 | $ | 39.5 | ||||
Satellites and Space Systems | 32.2 | 30.6 | ||||||
Advanced Space Programs | 19.1 | 12.4 | ||||||
Corporate and Other | (0.6 | ) | (1.3 | ) | ||||
Total Operating Income | $ | 89.9 | $ | 81.2 |
Full year 2008 operating income was
Fourth Quarter Results from Continuing Operations
Income from continuing operations was
The effective income tax rate was approximately 20% in the fourth
quarter of 2008 reflecting the reversal of a reserve primarily related
to the completion of an
Diluted weighted-average shares outstanding decreased to 59.4 million in the fourth quarter of 2008 compared to 60.6 million in the fourth quarter of 2007 reflecting the repurchase of 2.5 million shares of stock since year-end 2007, partially offset by issuances of stock.
Full Year Results from Continuing Operations
Income from continuing operations was
The effective income tax rate was approximately 35% in 2008 reflecting
the reversal of a reserve primarily related to the completion of an
The company sold its Transportation Management Systems business unit
during the second quarter of 2008 and recognized a
Net income was
Cash Flow and Balance Sheet
Free cash flow was
Cash flow for 2008 was as follows (in millions):
2008 | ||||||||
Fourth Quarter | Full Year | |||||||
Net Cash Provided by Operating Activities | $ | 21.8 | $ | 108.8 | ||||
Capital Expenditures | (7.7 | ) | (26.5 | ) | ||||
Free Cash Flow | 14.1 | 82.3 | ||||||
Net Proceeds from Sale of TMS Business Unit | - | 41.6 | ||||||
Repurchase of Common Stock | (27.9 | ) | (49.5 | ) | ||||
Proceeds from Issuance of Common Stock and Other | 1.4 | 18.1 | ||||||
Net (Decrease) Increase in Cash | (12.4 | ) | 92.5 | |||||
Beginning Cash Balance | 340.7 | 235.8 | ||||||
Ending Cash Balance | $ | 328.3 | $ | 328.3 |
Summary balance sheet data as of
Assets | Liabilities and Equity | |||||||
Cash | $ | 328.3 | Current Liabilities | $ | 259.7 | |||
Other Current Assets | 286.5 | Long-Term Debt and Other | 149.5 | |||||
Non-Current Assets | 253.9 | Stockholders’ Equity | 459.5 | |||||
Total Assets | $ | 868.7 | Total Liabilities and Equity | $ | 868.7 |
New Business Highlights
During the fourth quarter of 2008, Orbital received approximately
Operational Highlights
In the fourth quarter of 2008, Orbital carried out four major space
missions. Orbital completed the first two of these missions in October
when the company-built Interstellar Boundary Explorer (IBEX) space
science satellite was launched for
For the full year, Orbital carried out 17 major space missions,
including nine rocket launches and eight satellite and space system
deployments. In addition, the company delivered 13 other rockets and
satellite systems for deployment or future operational missions. The
company’s 2008 space mission operations included the deployment of
geosynchronous communications satellites for
Orbital’s 2009 operational schedule is expected to continue at a
similarly high level of activity. The company plans to carry out
approximately 25 major launch vehicle and spacecraft missions and to
complete and deliver an additional 10 or more launch vehicles and
satellites for future operations. Included in the mission totals are up
to seven space launch vehicles, four GEO communications satellites,
three missile defense interceptor launches and three target launch
vehicles. The 2009 operational schedule includes the first flight of
four new launch vehicle designs, including the initial flight of the
Launch Abort System for NASA’s Orion program, the first of up to four
flights of the Minotaur IV space launch vehicle for the
2009 Financial Guidance
The company has revised its financial guidance for 2009, as summarized in the table below:
Current | Previous | |||
Revenues (in millions) | $1,150 - $1,175 | $1,175 - $1,200 | ||
Operating Income Margin | 6.0% - 6.25% | 6.0% - 6.25% | ||
Diluted Earnings per Share (see below) | $0.80 - $0.87 | $0.85 - $0.92 | ||
Free Cash Flow (in millions) | $65 - $75 | $75 - $80 |
Orbital is engaged in a major product development program to create a
medium-capacity rocket called Taurus II. Orbital believes that this new
rocket could substantially expand the company’s space launch vehicle
market, yielding significant potential revenue growth in future years.
The 2009 outlook includes the impact of the Taurus II launch vehicle
development program, which is expected to reduce full year 2009 diluted
earnings per share by approximately
The 2009 guidance excludes the effect of the adoption of a new
accounting standard in 2009 pertaining to the company’s convertible
notes. Beginning in 2009, the company’s 2008 and prior years’ financial
statements will be restated to reflect the new accounting. The company
expects that its 2009 and 2008 income statements will each include
approximately
Disclosure of Non-GAAP Financial Measures
Free cash flow is defined as GAAP (Generally Accepted Accounting Principles) net cash provided by operating activities (the most directly comparable GAAP financial measure) less capital expenditures for property, plant and equipment. A quantitative reconciliation of free cash flow to net cash provided by operating activities is included above in the section entitled “Cash Flow and Balance Sheet.” Management believes that the company’s presentation of free cash flow is useful because it provides investors with an important perspective on the company’s liquidity, financial flexibility and ability to fund operations and service debt. Orbital does not intend for this non-GAAP financial measure to be considered in isolation or as a substitute for the related GAAP measure. Other companies may define this measure differently.
Adjusted income from continuing operations for 2008 is defined as GAAP income from continuing operations (the most directly comparable GAAP financial measure) adjusted to exclude an investment impairment charge. Adjusted diluted earnings per share from continuing operations is equal to adjusted income from continuing operations divided by diluted shares. These measures are provided so investors can more easily compare 2008 operating results to 2007 operating results. The reconciliation of these financial measures is as follows (in millions, except per share data):
Quarter Ended | Full Year | |||||
December 31, 2008 | 2008 | |||||
Reported Income from Continuing Operations | $ | 13.2 | $ | 48.8 | ||
Add Investment Impairment Charge | 6.2 | 17.8 | ||||
Adjusted Income from Continuing Operations | $ | 19.4 | $ | 66.6 | ||
Adjusted Diluted Earnings Per Share from Continuing Operations |
$ | 0.33 | $ | 1.11 |
About Orbital
Orbital develops and manufactures small- and medium-class rockets and space systems for commercial, military and civil government customers. The company’s primary products are satellites and launch vehicles, including low-Earth orbit, geosynchronous-Earth orbit and planetary spacecraft for communications, remote sensing, scientific and defense missions; human-rated space systems for Earth-orbit, lunar and other missions; ground- and air-launched rockets that deliver satellites into orbit; and missile defense systems that are used as interceptor and target vehicles. Orbital also provides satellite subsystems and space-related technical services to government agencies and laboratories.
“Safe Harbor” Statement Under the Private Securities Litigation Reform Act of 1995
Certain statements in this press release may be forward-looking in
nature or “forward-looking statements” as defined in the Private
Securities Litigation Reform Act of 1995. Such forward-looking
statements are subject to risks, trends and uncertainties that could
cause the actual results or performance of the company to be materially
different from the forward-looking statement. Uncertainty surrounding
factors such as continued government support and funding for key space
and defense programs, new product development programs, product
performance and market acceptance of products and technologies,
government contract procurement and termination risks (including the
outcome of bid protests), as well as other risk factors and business
considerations described in the company’s
A transcript of the earnings teleconference call will be available on Orbital’s website at http://www.orbital.com/Investor.
* “Adjusted income from continuing operations,” “adjusted diluted earnings per share” and “free cash flow” are non-GAAP financial measures. For additional details, please refer to the sections of this press release entitled “Cash Flow and Balance Sheet” and “Disclosure of Non-GAAP Financial Measures.”
** This is a non-GAAP financial measure calculated by adding back the
ORBITAL SCIENCES CORPORATION | ||||||||
Condensed Consolidated Income Statements | ||||||||
(in thousands, except per share data) | ||||||||
Fourth Quarter | ||||||||
2008 | 2007 | |||||||
Revenues | $ | 310,867 | $ | 279,140 | ||||
Cost of revenues | 251,030 | 230,269 | ||||||
Research and development expenses | 21,324 | 5,876 | ||||||
Selling, general and administrative expenses | 16,081 | 20,771 | ||||||
Income from operations | 22,432 | 22,224 | ||||||
Investment impairment charge | (6,200 | ) | - | |||||
Interest income and other | 1,381 | 3,421 | ||||||
Interest expense | (1,083 | ) | (1,080 | ) | ||||
Income before income taxes | 16,530 | 24,565 | ||||||
Income taxes | (3,371 | ) | (9,918 | ) | ||||
Income from continuing operations | 13,159 | 14,647 | ||||||
Income from discontinued operations, net of taxes | - | 1,131 | ||||||
Net income | $ | 13,159 | $ | 15,778 | ||||
Basic income per share: | ||||||||
Continuing operations | $ | 0.23 | $ | 0.25 | ||||
Discontinued operations | - | 0.02 | ||||||
Net income | 0.23 | 0.27 | ||||||
Diluted income per share: | ||||||||
Continuing operations | $ | 0.22 | $ | 0.24 | ||||
Discontinued operations | - | 0.02 | ||||||
Net income | 0.22 | 0.26 | ||||||
Shares used in computing basic income per share | 58,351 | 58,913 | ||||||
Shares used in computing diluted income per share | 59,396 | 60,622 |
Certain amounts in the company’s income statements have been reclassified as discontinued operations to give effect to the sale of the TMS business unit that occurred in the second quarter of 2008. |
ORBITAL SCIENCES CORPORATION | ||||||||
Condensed Consolidated Income Statements | ||||||||
(in thousands, except per share data) | ||||||||
Full Year | ||||||||
2008 | 2007 | |||||||
Revenues | $ | 1,174,263 | $ | 1,033,940 | ||||
Cost of revenues | 955,754 | 859,294 | ||||||
Research and development expenses | 51,406 | 15,565 | ||||||
Selling, general and administrative expenses | 77,193 | 77,857 | ||||||
Income from operations | 89,910 | 81,224 | ||||||
Investment impairment charge | (17,800 | ) | - | |||||
Interest income and other | 6,982 | 12,976 | ||||||
Interest expense | (4,333 | ) | (4,685 | ) | ||||
Income before income taxes | 74,759 | 89,515 | ||||||
Income taxes | (25,942 | ) | (35,852 | ) | ||||
Income from continuing operations | 48,817 | 53,663 | ||||||
Income from discontinued operations, net of taxes | 15,918 | 3,075 | ||||||
Net income | $ | 64,735 | $ | 56,738 | ||||
Basic income per share: | ||||||||
Continuing operations | $ | 0.83 | $ | 0.91 | ||||
Discontinued operations | 0.27 | 0.05 | ||||||
Net income | 1.11 | 0.96 | ||||||
Diluted income per share: | ||||||||
Continuing operations | $ | 0.81 | $ | 0.88 | ||||
Discontinued operations | 0.26 | 0.05 | ||||||
Net income | 1.08 | 0.93 | ||||||
Shares used in computing basic income per share | 58,569 | 59,164 | ||||||
Shares used in computing diluted income per share | 60,134 | 60,935 |
Certain amounts in the company’s income statements have been reclassified as discontinued operations to give effect to the sale of the TMS business unit that occurred in the second quarter of 2008. |
ORBITAL SCIENCES CORPORATION | ||||||
Condensed Consolidated Balance Sheets | ||||||
(in thousands) | ||||||
December 31, | December 31, | |||||
2008 | 2007 | |||||
Assets | ||||||
Cash | $ | 328,307 | $ | 235,822 | ||
Receivables, net | 208,739 | 183,507 | ||||
Inventory | 33,434 | 26,549 | ||||
Deferred income taxes, net | 35,368 | 44,420 | ||||
Other current assets | 8,951 | 5,508 | ||||
Total current assets | 614,799 | 495,806 | ||||
Non-current investments | 16,700 | 28,000 | ||||
Property, plant and equipment, net | 104,880 | 95,713 | ||||
Goodwill | 55,551 | 55,551 | ||||
Deferred income taxes, net | 71,690 | 90,942 | ||||
Other non-current assets | 5,033 | 9,456 | ||||
Total Assets | $ | 868,653 | $ | 775,468 | ||
Liabilities and Stockholders’ Equity | ||||||
Accounts payable and accrued expenses | $ | 179,658 | $ | 131,805 | ||
Deferred revenues and customer advances | 80,059 | 79,339 | ||||
Total current liabilities | 259,717 | 211,144 | ||||
Long-term debt | 143,750 | 143,750 | ||||
Other non-current liabilities | 5,700 | 325 | ||||
Total stockholders’ equity | 459,486 | 420,249 | ||||
Total Liabilities and Stockholders’ Equity | $ | 868,653 | $ | 775,468 |
ORBITAL SCIENCES CORPORATION | ||||
Condensed Consolidated Statements of Cash Flows | ||||
(in thousands) | ||||
2008 | ||||
Fourth | Full | |||
Quarter | Year | |||
Net income | $ 13,159 | $ 64,735 | ||
Gain on sale of business, net of tax | - | (14,800) | ||
Impairment of non-current investments | 6,200 | 17,800 | ||
Depreciation | 4,892 | 18,769 | ||
Deferred taxes | 3,141 | 19,980 | ||
Changes in assets and liabilities | (6,837) | (2,738) | ||
Other | 1,230 | 5,077 | ||
Net cash provided by operating activities | 21,785 | 108,823 | ||
Capital expenditures | (7,687) | (26,552) | ||
Net proceeds from sale of business | - | 41,612 | ||
Net proceeds from sale of property | - | 2,193 | ||
Net cash (used in) provided by investing activities | (7,687) | 17,253 | ||
Repurchase of common stock | (27,943) | (49,464) | ||
Net proceeds from issuance of common stock | 778 | 11,273 | ||
Other | 712 | 4,600 | ||
Net cash used in financing activities | (26,453) | (33,591) | ||
Net (decrease) increase in cash | (12,355) | 92,485 | ||
Cash, beginning of period | 340,662 | 235,822 | ||
Cash, end of period | $ 328,307 | $ 328,307 |
Source:
Orbital Sciences Corporation
Barron Beneski, 703-406-5528
Public
and Investor Relations
beneski.barron@orbital.com